Staff Writer

A month after its partner resubmitted a new drug application for arrhythmia drug vernakalant, Cardiome Pharma Corp. is adding $84 million to its coffers through a public offering to support further work on vernakalant, including the development of an oral formulation of the drug.

The Vancouver, British Columbia-based firm priced 8 million shares at $10.50 each, and agreed to grant underwriters an overallotment option of 1.2 million shares. If the overallotment is exercised in full, Cardiome will rake in net proceeds of about $90 million, with more than half of that - about $50 million, according to the company's prospectus supplement - expected to fund development and regulatory activities associated with vernakalant, formerly RSD1235, in atrial fibrillation.

An intravenous formulation of the drug for the acute conversion of AF demonstrated promising results in two pivotal studies, which led to the submission of an NDA by partner Astellas Pharma US in April 2006, but was followed by a refusal to file letter in May from the FDA citing "inconsistencies and omissions in the database." That regulatory delay dropped the company's stock 20 percent, but shares rebounded in the fall following the agency's rejection of an NDA for vernakalant's most threatening competitor, Multaq (dronedareon). Multaq's developer, Paris-based Sanofi-Aventis Group, said it plans to resubmit for approval in 2008. (See BioWorld Today, June 1, 2006, and Sept. 5, 2006.)

After consulting with the FDA, Astellas resubmitted the vernakalant NDA in December, at which time it agreed to pay Cardiome its $10 million milestone payment. Original terms of the deal called for the milestone payment upon FDA acceptance of the NDA.

Though not required for regulatory approval, the companies are conducting a third Phase III study to evaluate the drug in patients who develop transient atrial fibrillations following cardiac surgery and another study is ongoing to gather further safety data.

Astellas, a subsidiary of the Tokyo-based Astellas Pharma Inc., holds North American rights to the intravenous formulation of vernakalant. Cardiome retains rights outside the U.S. and holds worldwide rights on the oral version of vernakalant, which is in Phase II testing for the chronic use to prevent arrhythmia in AF patients.

Beyond vernakalant work, the remaining proceeds from Cardiome's public offering will be used to support the acquisition and development of additional programs, research and development on cardiovascular programs picked up from Artesian Therapeutics Inc., capital expenditures and for working capital and general corporate purposes.

The company acquired Gaithersburg, Md.-based Artesian in 2005 in a deal that calls for milestone payments of $32 million for each of the first two products developed. Artesian's programs include dual-pharmacophore compounds designed to simultaneously inhibit the cardiac phosphodiesterase enzyme and he L-Type calcium channel. Those programs are in preclinical development. (See BioWorld Today, Aug. 30, 2005.)

Cardiome reported a net loss of C$12 million (US$10.2 million) or C23 cents per share for the third quarter of 2006. As of Sept. 30, the company had cash totaling about C$50 million, though that does not include the $10 million milestone payment later received from Astellas. As of Oct. 26, the company had about 53.6 million shares outstanding.

New York-based Bear, Stearns & Co. Inc. acted as the book-running manager, while Toronto-based CIBC World Markets Inc. served as co-lead manager and Vancouver-based Canaccord Adams Inc. and Boston-based Leerink Swann & Co. served as co-managers. Canadian firms Raymond James Ltd., Orion Securities Inc. and Sprott Securities Inc. also were part of the underwriting syndicate.

Shares of Cardiome (NASDAQ:CRME) closed at $10.76 Thursday, down 15 cents.

In other financings news:

• Neurochem Inc., of Laval, Quebec, filed registration statements for $102 million in Canada and the U.S. including the resale of up to $60 million of its common shares, which might be issued under the equity line of a credit facility, as well as resale of 6 percent senior convertible notes. Neurochem is developing Kiacta (eprodisate, formerly Fibrillex) for AA amyloidosis, which is pending approval in U.S. and Europe, and Alzhemed (tramiprosate), which is in Phase III trials in Alzheimer's disease patients.